Posts Tagged ‘medicare’

Gaming the System

August 4, 2013

So-called Washington gridlock appears to work for the top one percent of America.  The economy is improving, and CEOs, top management, and professionals are raking it in.  Not so, for most others. That’s probably why it continues, and there is no end in sight.

The average American has seen his income decline over the past few decades, while the affluent American has seen his income dramatically increase.   The income gap between rich and poor is about as great as it was in the Gilded Age when the Robber Barons ran things.  After an anarchist assassinated President McKinley, his successor, President Theodore Roosevelt, became concerned about a revolution and started reforms, things like anti-trust laws to break up the monopolies.  The idea was to save American capitalism by reforming it.

President Franklin D. Roosevelt, who admired and wanted to emulate his cousin Teddy, took the same tact during the Great Depression, and for the same reason some historians report, to save American capitalism.   While the Russian revolution of 1917 brought on the communist state and the dictatorship of the murderous Joseph Stalin,  and the Great Depression set the stage for ruthless dictators Hitler and Mussolini to come into power in Germany and Italy,  the United States elected a president that promised it a New Deal. He is the only president in American history to  be elected four times to the office.

From about 1937 to 1947 income inequality dropped dramatically. This was brought about  by highly progressive taxation and the strengthening of unions, according to an article in Wikipedia. “And,,” the article says,”regulation of the National War Labor Board during World War II raised the income of the poor and working class and lowered that of top earners.” The middle class was at its peak and a “relatively low level of inequality remained fairly steady for about three decades ending in early 1970s.”

No doubt, the one percent leaders understand the lessons of those times.  When things get bad enough for the masses, they will revolt, maybe not violently in every case, but they will revolt.  There are ways to keep and increase the income gap while preventing revolt, and at the same time funnel tax dollars into their enterprises. They have figured out how to game the system.

Conservatives, including the American Medical Association, fought  the creation of Medicare with everything they had.  President Lyndon Johnson was a master at getting Congress to do what he wanted and he pushed through Medicare.  It was and is a very popular program and costs a lot less to administer – compare 3 percent to 20 percent – than private healthcare insurance. 

Recognizing this fact,  the healthcare industry’s leaders, for instance, obviously now understand that the majority of Americans want the government involved in providing healthcare.  Why not give them tax supported programs, but under the healthcare industry’s terms?

A good example is Congress passing of the Medicare “B” drug plan.   That plan doesn’t  allow Medicare to negotiate prices, which could lower them, but it does help senior Americans pay for their drugs, which means that billions in tax dollars are funneled into the coffers of the pharmaceutical companies. The CEO’s of the top eleven global pharmaceutical companies were paid  a total of $1.58 billion last year.  The top salary was $40 million.  Tax dollars paid a great deal of that.

Now, in spite of all the anti-Affordable Healthcare Act or “Obamacare” propaganda, guess who is not going to lose in that scenario?  The program calls for mandatory insurance for all Americans.  The lobbyists were successful in keeping out a government option healthcare insurance plan,  That was the one sure way of lowering premiums.  Only private healthcare providers will sell that mandatory insurance.  Do the math. 

Yes, the system can be gamed.



We Are Definitely Going Over the Fiscal Cliff

November 29, 2012

Mark Vitner, Wells Fargo Chief Economist (Photo by Jim Cawthorne, Camera1)


That’s what Mark Vitner told members of the Rotary Club of Columbus. He is the Chief Economist for Wells Fargo.  He says if we define going over the fiscal cliff as an increase in taxes and less government spending, it’s definitely going to happen. 

He doesn’t think, however, that it will throw us  into a depression, and, after the speech, he told me that the bottom line is that things will get better next year economically, but not by much.  The big problem,he says, is uncertainty. Businesses don’t expand and hire more people when there is uncertainty.

From what I have been reading and hearing on television, that uncertainty will only come close to ending when the president and Congress reach a compromise over how to raise revenues and cut spending. The president wants Congress to go ahead and vote to let the Bush tax cuts stay in force for those making less than $250 thousand a year.  The rest of the details, such as what to do about increasing taxes on the wealthiest 2 percent, can be worked out later.

A lot, certainly not all, of wealthy Americans are agreeable about paying more taxes.  A prime example is billionaire Warren Buffet. He thinks they should be raised on Americans making between  $500 thousand and $1 million a year. 

Republican leadership is sticking by its demand that the tax cuts remain in force for everyone, including the top two percent, but there are now some legislators saying their of oath of office trumps their oath to Grover Norquist , who has turned out to be a very powerful lobbyist indeed.  95 percent of Republicans in Congress signed his no-tax-increases pledge.   

Vitner says that conservatives, even those who would be willing to compromise, fear what would happen to them in their reelection bids if they voted to increase anyone’s taxes.  Going over the cliff maybe what will allow them to compromise. If the tax cuts end, they can then vote for another tax cut, then say they didn’t vote for a tax hike, but a tax cut.     

A lot is at stake in this mess. As you know, programs like Medicare, Social Security, and the military  are involved.   

Who knows what will happen. It’s really hard to get some politicians to put country ahead of party, especially when they are afraid their actions will hurt them at reelection time. . 

Jazz and the Fiscal Cliff

November 12, 2012

They don’t really have anything to  do with one another, but it’s Monday and that means I need a new post since I said I would try to have a new one on Mondays.  Since I can’t seem to settle on one subject, I guess I’ll do a stream of consciousness thing.

The most recent thing that impressed me was the performance of the Atlanta 17 at the Columbus Jazz Society gathering at St. Thomas Episcopal Church yesterday. Wonderful big-band jazz played by Atlanta area businessmen and professionals.  The drummer is a retired chiropractor, for instance,  The crowd, including me, loved it.  The crowd, however should have been larger. I guess the Jazz Society needs better publicity.

The other thing rising to my cognitive surface is what Congress and the president are going to do  about cutting spending and raising taxes.  Like the  guy says, “I don’t want the federal government messing with my Medicare.” I understand somebody really said that.  While we’re at it, I don’t want it messing with my Social Security, either.

I don’t want my taxes going up, either; however, I do want a few things like improved roads, bridges, rapid transit, and schools, and a balanced budget!

Weapon Words

January 29, 2012

When Rush Limbaugh first went on the air, I listened to him a lot to find out what he was all about. After a while, I totally understood and realized that I didn’t need to listen to him any more because I knew exactly where he would come down on any issue, and because he was repeating himself.  However, the talk I have been hearing recently about being conservative or liberal, and what those words stand for, reminded me of one of his early conversations.

The man he had on the line said he didn’t think it was useful to label people. Rush totally disagreed. He said in such a way – I don’t remember the exact words – that it said to me, No, wait a minute, bub. you’re not going to take that weapon away from me.

And that reminded me of what a salesman and air personality who worked with me at WBML in Macon, Georgia in the early 1950s when I was going to Mercer University, told me about the late racist Georgia Governor Eugene Talmadge.  The salesman said he had worked as a broadcast consultant for Talmadge at one time.  He told me that he asked Talmadge about his race baiting on the campaign stump, “Why do you do that? You can win without  it.” He said Talmadge told him, “That’s my ‘weepon’, son. I can’t give up my ‘weepon.'” “Weepon” was his faux-country dialect for weapon, of course. Eugene Talmadge spoke the flagrant racist redneck of the time, but definitely knew better. He had a degree in English from the University of Gerogia.

I think for most people labeling is often misleading.  Not everyone who is conservative or liberal on some things is conservative or liberal on all things.  Most conservatives I know are definitely for tax supported public education.  They are also for public highways, street lights, traffic lights, libraries, and, actually, it’s hard to find a conservative who now admits he or she is opposed to Social Security, Medicare or Medicade, though conservatives fought them tooth and nail and called them socialistic when they were passed into law.  All of those things could come under the socialism rubric. Does that make conservatives who now support them  socialists?

The truth is that most of us support some things considered socialistic and some capitalistic.  We have, and have had from the beginning of this country, a mixed economy, part capitalistic and part socialistic.  Yes, it has trended more in one direction or the other during certain time periods.  But, as  far as I can discern, it has never been totally one way or the other.

I guess what it boils down to is that some people like to think in terms of things being either black or white, and others realize that most are really in shades of grey.

However, that doesn’t mean the politicians who really know all of that are going to give up their weapon words. I don’t know if that will ever happen.

What Got Us in This Economic Mess We Are In?

July 12, 2008

When I started this blog, I stated that it would mainly focus on local and state issues. That focus gives me a lot of leeway because so much of what happens in other places affects us here.

For instance, when I heard the national news that the mortgage giants Freddie Mac and Fannie Mae could fail, I didn’t call anyone in Washington; I called my local stock broker to get filled in. He did a good job of it and as a result I don’t feel any better about it.

Freddie and Fannie may have to be bailed out by the federal government. If so, I’m for it. Their going under would be an international economic disaster. They hold five trillion dollars in mortgages. That’s more than half the national debt.

All of the lousy economic things that have been happening lately naturally make us want to find someone to blame. Well, that isn’t hard to do. Somebody screwed up big time. One of the big screw ups was to privatize Freddie and Fanny. It started out in 1938 as a government agency designed to help Americans get home mortgages. It worked. But, Congress couldn’t leave well enough alone, deciding to let it be taken over by two private companies, but gave them special treatment, for one thing, implying that the loans would be backed by the government. I just read a story on that said the firms took advantage of that special treatment, deciding to use it to increase profits for its stock holders. That desire for constantly increasing profits led to risky loan practices which contributed to the situation the country is in right now.

Columbus is traditionally not like the rest of the country when recessions strike. Fort Benning is the reason for that. The money from the post keeps flowing into Columbus no matter what the state of the national economy. However, the foreclosure rate has been high in the area so it is not totally immune from national economic trends. And, if what I have been reading is true, if Fannie and Freddie collapse, the home real estate market will come to a screeching halt everywhere in the country, including Columbus.

What are my credentials for making the economic observations? Not impressive, but everything I wrote is based on something that my stock broker told me, or what some financial expert said on TV and radio and wrote online. If I am wrong about any of this, feel free to correct me. Just click the “comments” link below and write away.

If the fed does bail out Freddie and Fannie, it will cost billions in tax dollars. Since our taxes come nowhere near paying for what the government spends, it will have to borrow more from China and Japan. Just think of the tax dollars we have to spend paying the interest rates on those loans.

The federal government simply has to become more responsible with our tax dollars. The pork that Congress doles out every year to keep getting reelected has to stop. What makes us think that we can continue to be Santa Claus to the rest of the world? Why are we spending so incredibly much on maintaining troop presence is so many places in the world? Why are they still in Germany and Japan? World War Two was over in 1945 and both countries have been thriving democracies for about 60 years. They are allies now, good ones. Can we really afford to be the world’s police force? We should limit our military action to that which truly is in our national interest, such as Afghanistan, where we need to increase our presence.

What about Social Security, Medicaid and Medicare? All three are in trouble. And what do some want to do to solve the problem? Privatize. That’s just not always the solution. Think Fannie Mae and Freddie Mac.